Labour needs Clement Attlee's spirit – but not his strategic blunder

Rebuilding Britain will take the political courage of 1945. But a similar lack of vision on industrial democracy could be fatal

'We opted for the important but limited role of securing better terms and conditions instead of pressing for workers to have positions on the board and taking up every chance to democratise economic relationships.' Illustration by Satoshi Kambayashi Guardian

When Clement Attlee died Harold Wilson commented: "Fainter hearts than his would have used the nation's economic difficulties as a reason for postponing social advance. He felt, on the contrary, that the greater the economic difficulties, the greater the need for social justice."

Britain's problems today may not be those of a country recovering from total war, but a future Labour government can learn a great deal from Attlee's determination. Of course our expectations need to be realistic. What we cannot expect from Labour is the political equivalent of a videotape played backwards: a new government has to recognise the damage and missed opportunities of the coalition and move to put them right – but it will begin from a very different starting point.

The TUC's relations with Labour are not always easy, but we have a shared interest in creating a fairer, more equal Britain that recognises the tough times austerity has created for millions of ordinary families.

If our analysis of the 2008 crash recognises that a bubble delivering fake prosperity burst, then we know that money will be tight, even after reversing self-defeating austerity. But that is not an argument for ministers to be timid. On the contrary, they will need to be more radical in delivering structural change and shaking up the economy, redefining the role of state and markets. For example, rather than being prepared in perpetuity to use tax credits to subsidise insecure and low-paid work, we need action to create good, sustainable jobs, spread the living wage and create modern wages councils to set fair rates in industries that can easily afford to better the minimum wage.

In any case our problems are urgent. The need to decarbonise the economy grows by the day, but this environmental imperative can spur the industrial investment and infrastructure spend that drives jobs and growth.

A broken banking system needs rebuilding – with regional banks and both a green and a state investment bank. Active industrial policy with a strong regional dimension already has wide support among employers and unions. The need to invest in a major programme of social and affordable housing can kickstart growth and meet huge social need. Public ownership of railways will be cheaper than the huge corporate welfare bill paid to private operators at the moment.

But unions must learn too from the mistakes of the Attlee period. This was when we made our key strategic error in not going down the European route of what is called co-determination on the continent, and we describe as industrial democracy. We opted for the important but limited role of securing better terms and conditions instead of pressing for workers to have positions on the board and taking up every chance to democratise economic relationships. If we stand aside as we did then, this time history will pass us by.

As even some Conservatives acknowledge, industrial relations in many companies are good. Of course there are differences of interest and opinion, and there needs to be power on both sides of a negotiating table. But there is also a recognition of a long-term mutual interest in generating rewarding jobs, stimulating skills and tapping the undoubted expertise of the workforce.

Unions and working people need to be at the heart of the economy, giving a voice, winning fairness and shaping business decisions that will deliver sustainable prosperity in the decades to come. That poses a challenge to business after decades of shareholder supremacy and the manager's right to manage. But I make no apologies for that: too much power in the hands of too few people got us into this mess. Giving workers a say can help get us out of it.

But this poses equally big challenges to trade unionists. It implies a role that is not just more ambitious, but more demanding, than the one we have now. It means accepting responsibilities for the greater good and moving out of a comfort zone. However, we already play that higher role in the best workplaces and in policy areas such as the environment, pensions, skills and health and safety, where common advantage is clear to all.

Of course none of this means giving up on our defining purpose of winning a better deal for workers. The majority of EU countries now guarantee workers seats on the board. It has not stopped their unions from fighting maltreatment and exploitation, or prevented them from taking industrial action when left with no other option.

But what about Labour? It needs to recognise that some of the electoral tactics and approaches that worked 10 and 15 years ago are now as much old Labour as what worked in 1945. Instead, the party needs to start where people are: the problems of stagnation, declining living standards and poor prospects now afflict a huge majority of the electorate – whether they tick the traditional supporter box or not.

And rather than a rainbow coalition of different promises and messages for different groups, Labour needs a compelling vision and lived values that show how much better Britain could be.

And while prospective ministers do of course need to be clear what they will do when the red boxes arrive, the challenge is not to build a huge Labour policy encyclopedia, but to set a clear sense of direction and rediscover the inspirational language of progressive change.

Attlee's political genius was to give people a sense of hope, a clear route map out of depression, war and austerity towards the social and economic justice they craved. His government rebuilt Britain, and the next government needs the political courage to do the same – including giving working people a voice so we can help build a more equal, more democratic country. We must not miss the chance again.